The bumpy way of China's overseas investment -- People's Daily Online
The bumpy way of China's overseas investment - Special

08:30, June 30, 2009

How far will China's expansion bids go

"… China should realize that even with the support of the state banking sector, even with the damage the global financial crisis has inflicted on Western business, China cannot expect to implement its investment strategy unopposed."

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· Commerce Minister: China expects bigger overseas investment

"China has doubled overseas investment in recent years and will make great efforts on trade and investment facilitation by offering more financial support, simplifying the approving process and signing agreements with more countries."

· China relaxes control on forex use to help domestic firms invest overseas

Relaxed control was aimed to solve the financing difficulties of Chinese firms when they expand overseas, and such support for overseas expansion was meant to boost exports.

· China to encourage overseas investment with easier procedures

Domestic companies will be allowed to register the source of their foreign exchange financing after their investment overseas instead of obtaining approval beforehand.

· China issues guidelines for overseas investment

The guidelines are based on the laws, regulations and official statistics of the countries and regions, so they are objective in reflecting the regional situation.

· Sinopec offers US$7.22 billion for Addax
· PetroChina completes purchase of 45.5% of Singapore Petroleum shares
· China's overseas investment: the chance of getting money, instead of getting trapped

"Analyses shows that export-oriented acquisition has a higher probability of failure but import-substitution acquisition has a higher chance of success."

· Chinese enterprises should better prepare for integration

Integration involves not only finance and business, by merely adding them together, but also other problems such as transnational cultural conflicts and management conflicts.

· Only one third of Chinese enterprises' overseas investment projects successful

"… Chinese enterprises should take a positive and cautious attitude toward these opportunities and avoid blindly bargain hunting."

· Quality concern the biggest problem for China's outbound investment
· Firms in fight to shake off "China Inc" image

"Constantly refuting links with the State does not necessarily help, in fact it only hinders the process, creating an impression of dishonesty in the eyes of many observers."

· Money not everything when it comes to overseas investment

The continuing spread of investment protectionism also poses as a new challenge to China's enterprises and increases difficulty and complexity of M&As.

· China concerned about trade and investment barriers

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